Student Credit Cards – How to Be A Responsible User

Student credit cards are truly valuable, because they help college students make ends meet, as they live in college dorms and are far away from home. However, these should be used intelligently, because if they are not wisely used, then they can be the start of the student’s financial troubles. Here are a few useful ideas on how to be a responsible user.

What Are The Student’s Cards Main Function?

Student credit cards are just like any other card, but these can be obtained on college campuses. Many firms often post notices which enticed college students to apply, with some offering freebies like t-shirts, caps, mugs and umbrellas to them. These cards can be used in most retail establishments, for purchasing products on credit, or for paying tuition fees and other school-related expenses. Students can make payments by sending their monthly dues to the company.

The Perks of Owning One

Student credit cards provide college students with a large degree of financial independence, wand for most; this will be the first time that they are able to obtain credit without their parents assisting them. How the student uses the card will have a major effect on their future financial health and credit standing. If they use these cards properly, they can acquire juicier offers for larger credit balances, and get other rewards like free miles, cash and shopping points.

Student Cards However Have the Highest Interest Rates

One of the biggest drawbacks of having a student credit card is that these cards commonly carry the highest interest rates, as compared to other credit or debit instruments. The rate usually goes as high as 25 to 30 percent, and although the introductory rates may be low, if the individual misses one or more payments, the rate is likely to double or even triple.

Students Should Limit Their Spending

According to a CEO of a review website, if you spend more than what you can really afford, using your credit badly, this can send you into a debt quagmire. It is common for companies to increase the credit limit over time, especially when the student approaches the present limits. And if the bank notices that the student makes his or her minimum payments on time, they too are likely to increase the limit.

Don’t Use The Card to Pay for your Tuition

Some credit experts are contending that if you have no money to pay your school tuition, and you need to borrow, make sure not to place your tuition bill on a credit card. Instead, why not try getting a federal or private student loan. These types of loans generally come with low fixed rates, as compared to credit cards. Also try to pay for your books with the cash you earned, instead of using the credit card. Do your very best to explore other options before using the student card.

If the student is irresponsible in using the student credit card, it can cause a lot of damage to his or her future financial, and academic standing. For example, if the student’s debts start piling too fast, they might focus more of their attention to raising enough money to pay for it, instead of doing their school coursework. A card default can also negatively impact the student’s chances of getting a housing or car loan in the future.